Remember the ‘race for space’? At the height of pandemic pandemonium, many homeowners were plotting to move out of cities in search of bigger homes. Now, the trend seems to have reversed, data suggest1, with smaller homes seeing higher demand.
Flats are back
At the start of 2024, smaller homes recorded the strongest increases in price growth. Analysts suggest this was in part the result of buyers adjusting their expectations to compensate for higher borrowing costs.
However, the move to smaller homes is also a feature of homeowners returning to city centres. In particular, flats are back in demand: annual price growth for flats reached 2.7% in February, a sharp turnaround from a fall of -5.9% last autumn.
Small change
In total, 53% of homes sold with a mortgage in 2023 were smaller properties, the highest proportion in nearly 30 years. Whether this big boost for smaller homes is here to stay remains to be seen.
1Halifax, 2024
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